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2. Pizza Hut is adding pasta salad to their menu and is trying to decide what price to charge; after it makes its decision,

2. Pizza Hut is adding pasta salad to their menu and is trying to decide what price to charge; after it makes its decision, Dominos is going to decide whether to enter the pasta salad market as well. Use the decision tree to determine whether Pizza Hut should deter Dominos from entering the market for pasta salad. Which price should Pizza Hut charge? Assume that each firm must earn a 25% return on investment to break even. Explain Pizza Huts decision process. Rates of Return Pizza Hut Dominos Enter Dominos Decision Enteror Dont Enter 2890 28% $7.49 Rates of Return Dont Enter Pizza Hut Dominos Pizza Hut Decision: Charge High Price or Low Price 45% Rates of Return Enter Pizza Hut Dominos Dominos Decision Enteror Dont Enter $4.99 12% 12% Rates of Return Dont Enter Pizza Hut Dominos 30%


 

2. Pizza Hut is adding pasta salad to their menu and is trying to decide what price to charge; after it makes its decision, Domino's is going to decide whether to enter the pasta salad market as well. Use the decision tree to determine whether Pizza Hut should deter Domino's from entering the market for pasta salad. Which price should Pizza Hut charge? Assume that each firm must earn a 25% return on investment to break even. Explain Pizza Hut's decision process. Pizza Hut Decision: Charge High Price or Low Price $7.49 $4.99 Domino's Decision: Enteror Don't Enter Domino's Decision: Enteror Don't Enter Enter Don't Enter Enter Don't Enter Rates of Return Pizza Hut Domino's 28% 28% Rates of Return Pizza Hut Domino's 45% Rates of Return Pizza Hut Domino's 12% 12% Rates of Return Pizza Hut Domino's 30%

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